The gold market remains unsettled as the US trade tariffs negotiations get postponed. A decision is yet to be made on China’s pending goods. The deadline prolongs as the meet with China and the US Federal Reserve bank haven’t rendered a conclusion. The gold investors are still drifting along with the uncertainty of the market.
If the trade tariffs result gets declared by Wednesday, the gold market will experience a positive improvement. Also, when there is political and financial insecurity, the bullion becomes the alternative sector for investments.
The worst-case scenario for Washington and Beijing is if the result gets delayed and the deadline is not met with. This is supposed to be by the end of this week. The USA trade representatives have not yet responded to comments on the tariffs deal with China.
In Prithviraj Kothari’s opinion, The solution to the problems faced by the gold market still lies with the trade negotiation between China and the US.
If the US trading interest rates on gold gets increased, this would boost the dollar. Dollar gaining more strength could weaken the gold price in the domestic market.
President of the United States, Donald Trump announced that there would be an expected meeting with the top advisors about the planned trade tariffs negotiation with China on December 15th on the $160 billion China goods put on hold.
Gold rose by 1 percent and also reached its highest peak on December 5th after the interest rates remained unchanged by the US central bank. Therefore, the cost of borrowing won’t be affected too.
According to Prithviraj Kothari, The US Federal Reserve Bank dismissed any chance of interest rates increasing, which has allowed the dollar rates to fall.
In the upcoming year 2020, the US Federal Reserve bank would initiate a possible expansion of the balance sheet. This should help the gold market thrive positively. Gold would be an evident feature in asset allocation during periods of market uncertainty. The chances of interest rates being low will also assist the gold market to soar higher towards 2020.
The domestic market has experienced several hints of the increase in the gold price and also a subdued price too. The year 2019 has proven to be a unique year for gold investors and those into bullion dealings.
The international tension has affected the way the 2019 gold market carried out their business interactions.
The US representatives stated that the tariffs are going to be decided based on how it defends the economy and should not have a negative effect on the global markets.
Spot gold remains at $1,474.71 per ounce, as of 0453 GMT. US gold futures were up 0.3 percent at $1,479 per ounce.
Palladium was 0.1 percent at $1,911.84 an ounce. Silver was 0.2 percent at $16.89 per ounce. Metal overreached an all-time high of $1,918.50 earlier in the season.
The mines in South Africa shut down after the severe power blackouts due to flash flooding giving rise to metal surpassing $1,900 for the first time.